It’s Budget Season again.
Whether this is your first multifamily budget, or your hundredth, it can be daunting to create and justify an accurate budget.
Some things will be fairly predictable. You can factor increases in property taxes and maintenance fairly well, but what about utilities and other variable expenses? An accurate budget will mean you need to factor in rate increases, and account for anomalies like pool fills, major leaks, and weather that is warmer or colder than normal.
It might be tempting to just add a blanket 3-5% increase and buy some new gym equipment with any leftover funds, but this doesn’t work for more than a handful of units, and getting it wrong means your net operating income takes big hit. If you have a new property or just completed lease-up, landing on the correct budget poses even more challenges.
We asked our own Kate Forsyth for some budgeting tips. Over the past 20 years, she’s created hundreds of multifamily budgets. She’s put together a worksheet for you and some great tips to get the most accurate budget possible.